0001569994-19-000024.txt : 20190423 0001569994-19-000024.hdr.sgml : 20190423 20190423160135 ACCESSION NUMBER: 0001569994-19-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20190423 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20190423 DATE AS OF CHANGE: 20190423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Waterstone Financial, Inc. CENTRAL INDEX KEY: 0001569994 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36271 FILM NUMBER: 19761588 BUSINESS ADDRESS: STREET 1: 11200 WEST PLANK COURT CITY: WAUWATOSA STATE: WI ZIP: 53226 BUSINESS PHONE: (414) 761-1000 MAIL ADDRESS: STREET 1: 11200 WEST PLANK COURT CITY: WAUWATOSA STATE: WI ZIP: 53226 8-K 1 form8k.htm
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 23, 2019
WATERSTONE FINANCIAL, INC.
(Exact name of Registrant as specified in its charter)

Maryland
(State or Other Jurisdiction
of Incorporation)
001-36271
(Commission File Number)
90-1026709
(I.R.S. Employer Identification No.)

11200 W. Plank Ct, Wauwatosa, Wisconsin 53226
(Address of principal executive offices)

(414) 761-1000
Registrant's telephone number, including area code

Not Applicable
(Former Name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
 
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
 
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities and Exchange Act of 1934 (§240.12b-2 of this chapter).

¨ Emerging growth company

¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.02 Results of Operations and Financial Condition.

On April 23, 2019, Waterstone Financial, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2019.  A copy of the press release is being furnished to the Securities and Exchange Commission as Exhibit 99.1 attached to this report and incorporated by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No. Description

99.1                          Press release of Waterstone Financial, Inc. issued April 23, 2019.




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 2 -
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Waterstone Financial, Inc.
   
Date:  April 23, 2019
/s/ Mark R. Gerke
Name: Mark R. Gerke
Title: Chief Financial Officer

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 3 -
 
 
 
EXHIBIT INDEX




Exhibit No.    Description
 
 99.1                          Press release of Waterstone Financial, Inc. issued April 23, 2019.

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 4 -
 EX-99.1 2 exhibit991.htm
Exhibit 99.1
 
 
WATERSTONE FINANCIAL, INC.
WATERSTONE BANK
11200 W. PLANK CT.
WAUWATOSA, WI 53226
 
Contact:  Mark R. Gerke
Chief Financial Officer
414.459.4012
markgerke@wsbonline.com
 
 

Waterstone Financial, Inc. Announces Results of Operations for the Quarter Ended March 31, 2019.

WAUWATOSA, WI – 04/23/2019 – Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $6.5 million, or $0.24 per diluted share for the quarter ended March 31, 2019 compared to $7.0 million, or $0.25 per diluted share for the quarter ended March 31, 2018.
“We achieved strong quarterly earnings driven by a record pre-tax earnings in the first quarter for the Community Banking segment,” said Douglas Gordon, CEO of Waterstone Financial, Inc. “Due to the consistent earnings and strong capital position, we were able to declare a $0.50 special dividend, in addition to our regular quarterly dividend and stock repurchases. We continue to maintain strong asset quality and remain disciplined with respect to expense management at the Community Banking segment. The Mortgage Banking segment’s performance rebounded compared to the linked quarter, driven by the elimination of underperforming offices and continued expense control measures.”

Highlights of the quarter ended March 31, 2019

Waterstone Financial, Inc. (Consolidated)

·
Consolidated net income of Waterstone Financial, Inc. totaled $6.5 million for the quarter ended March 31, 2019, compared to $7.0 million for the quarter ended March 31, 2018.
·
Consolidated return on average assets was 1.39% for the quarter ended March 31, 2019 compared to 1.57% for the quarter ended March 31, 2018.
·
Consolidated return on average equity was 6.65% for the quarter ended March 31, 2019 and 6.90% for the quarter ended March 31, 2018.
·
Dividends declared totaled $0.62 per share during the quarter ended March 31, 2019.
·
The Company repurchased a total 462,400 shares on the open market during the quarter ended March 31, 2019 at an average price of $16.53 per share.

Community Banking Segment

·
Pre-tax income of the segment totaled $7.5 million for the quarters ended March 31, 2019 and March 31, 2018.
·
Net interest income of the segment totaled $13.1 million for the quarter ended March 31, 2019 compared to $13.3 million for the quarter ended March 31, 2018.
·
Average loans held for investment totaled $1.38 billion during the quarter ended March 31, 2019, which represents an increase of $78.9 million, or 6.1% over the comparable quarter in the prior year. Average loans increased $10.4 million, or 3.1% annualized, compared to the quarter ended December 31, 2018.
·
Our net interest margin decreased 27 basis points to 2.93% for the quarter ended March 31, 2019 compared to 3.20% for the quarter ended March 31, 2018, which was a result of the increase in cost of deposits as certificates of deposit repriced at higher rates over the past year. Net interest margin decreased six basis points compared to 2.99% for the quarter ended December 31, 2018.
·
The segment had a negative provision for loan losses of $700,000 for the quarter ended March 31, 2019 compared to $900,000 for the quarter ended March 31, 2018. Asset quality continues to remain strong along with minimal net charge-offs.
·
Noninterest income decreased $58,000 for the quarter ended March 31, 2019 compared to the quarter ended March 31, 2018 as fees earned on loans decreased.
·
Noninterest expenses decreased $445,000 for the quarter ended March 31, 2019 compared to the quarter ended March 31, 2018 as compensation; communications; real estate owned; and other noninterest expenses decreased.
·
The efficiency ratio for the community banking segment improved 230 basis points to 51.64% for the quarter ended March 31, 2019, compared to 53.94% for the quarter ended March 31, 2018.
·
Average deposits totaled $1.04 billion during the quarter ended March 31, 2019, which represents an increase of $66.3 million, or 6.8%, over the comparable quarter in the prior year.  Average deposits increased $19.0 million, or 7.5% annualized, compared to the quarter ended December 31, 2018.
·
Nonperforming assets as percentage of total assets was 0.44% at March 31, 2019, 0.45% at December 31, 2018, and 0.54% at March 31, 2018.
·
Past due loans as percentage of total loans was 0.46% at March 31, 2019, 0.50% at December 31, 2018, and 0.53% at March 31, 2018.
·
Net charge-offs were $8,000 for the quarter ended March 31, 2019.  Net charge-offs were $7,000 for the quarter ended March 31, 2018.



- 5 -
Mortgage Banking Segment

·
The Mortgage Banking segment totaled a pre-tax income of $1.0 million for the quarter ended March 31, 2019, compared to $1.6 million of pre-tax income for the quarter ended March 31, 2018.
·
Loan originations decreased approximately $14.6 million to $501.4 million during the quarter ended March 31, 2019, compared to $516.0 million during the quarter ended March 31, 2018.  Origination volume relative to purchase activity accounted for 89.9% of originations for the quarter ended March 31, 2019 compared to 85.0% of total originations for the quarter ended March 31, 2018.
·
Mortgage banking income decreased $1.2 million, or 4.7%, to $23.6 million for the quarter ended March 31, 2019, compared to $24.7 million for the quarter ended March 31, 2018.
·
Gross margin on loans sold decreased 1.3% to 4.57% for the quarter ended March 31, 2019 compared to 4.63% for the quarter ended March 31, 2018.

About Waterstone Financial, Inc.

Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield, Oak Creek, Oconomowoc/Lake Country, Pewaukee, Waukesha/Brookfield, and West Allis, Wisconsin and a commercial lending office in Minneapolis, Minnesota. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 47 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as “may,” “expects,” “anticipates,” “estimates” or “believes.”  Such statements are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements.  These factors include (i) exposure to the deterioration in the commercial and residential real estate markets which could result in increased charge-offs and increases in the allowance for loan losses,  (ii) various other factors, including changes in economic conditions affecting borrowers, new information regarding outstanding loans and identification of additional problem loans, which could require an increase in the allowance for loan losses, (iii) Waterstone’s ability to maintain required levels of capital and other current and future regulatory requirements, (iv) the impact of recent and future legislative initiatives on the financial markets, and (v) those factors referenced in Item 1A. Risk Factors in Waterstone’s most recent Annual Report on Form 10-K and as may be described from time to time in Waterstone’s subsequent SEC filings, which factors are incorporated herein by reference.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone’s belief as of the date of this press release.



- 6 -





WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Unaudited)
  
 
  
For The Three Months Ended March 31,
  
 
  
2019
    
2018
  
 
      
Interest income:
       (In Thousands, except per share amounts)
  
Loans
  
$
17,104
      
15,458
  
Mortgage-related securities
    
759
      
638
  
Debt securities, federal funds sold and short-term investments
    
1,309
      
867
  
Total interest income
    
19,172
      
16,963
  
Interest expense:
                
Deposits
    
3,990
      
2,314
  
Borrowings
    
2,246
      
1,508
  
Total interest expense
    
6,236
      
3,822
  
Net interest income
    
12,936
      
13,141
  
Provision for loan losses
    
(680
)
    
(880
)
Net interest income after provision for loan losses
    
13,616
      
14,021
  
Noninterest income:
                
Service charges on loans and deposits
    
379
      
399
  
Increase in cash surrender value of life insurance
    
344
      
328
  
Mortgage banking income
    
23,359
      
24,187
  
Other
    
175
      
269
  
Total noninterest income
    
24,257
      
25,183
  
Noninterest expenses:
                
Compensation, payroll taxes, and other employee benefits
    
20,639
      
20,983
  
Occupancy, office furniture, and equipment
    
2,776
      
2,639
  
Advertising
    
958
      
860
  
Data processing
    
769
      
625
  
Communications
    
328
      
382
  
Professional fees
    
695
      
700
  
Real estate owned
    
32
      
317
  
Loan processing expense
    
805
      
988
  
Other
    
2,347
      
2,653
  
Total noninterest expenses
    
29,349
      
30,147
  
Income before income taxes
    
8,524
      
9,057
  
Income tax expense
    
1,982
      
2,104
  
Net income
  
$
6,542
      
6,953
  
Income per share:
                
Basic
  
$
0.25
      
0.25
  
Diluted
  
$
0.24
      
0.25
  
Weighted average shares outstanding:
                
Basic
    
26,499
      
27,509
  
Diluted
    
26,720
      
27,802
  



- 7 -

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  
 
  
March 31,
    
December 31,
  
 
  
2019
    
2018
  
 
  
(Unaudited)
        
Assets
  
(In Thousands, except per share amounts)
  
Cash
  
$
77,381
    
$
48,234
  
Federal funds sold
    
17,905
      
25,100
  
Interest-earning deposits in other financial institutions and other short term investments
    
9,547
      
12,767
  
Cash and cash equivalents
    
104,833
      
86,101
  
Securities available for sale (at fair value)
    
184,224
      
185,720
  
Loans held for sale (at fair value)
    
123,011
      
141,616
  
Loans receivable
    
1,379,866
      
1,379,148
  
Less: Allowance for loan losses
    
12,561
      
13,249
  
Loans receivable, net
    
1,367,305
      
1,365,899
  
 
                
Office properties and equipment, net
     24,215
      
24,524
  
Federal Home Loan Bank stock (at cost)
    
19,350
      
19,350
  
Cash surrender value of life insurance
    
67,894
      
67,550
  
Real estate owned, net
    
1,649
      
2,152
  
Prepaid expenses and other assets
     36,184
      
22,469
  
Total assets
  
$
1,928,665
    
$
1,915,381
  
 
                
Liabilities and Shareholders' Equity
                
Liabilities:
                
Demand deposits
  
$
128,470
    
$
139,111
  
Money market and savings deposits
    
175,380
      
163,511
  
Time deposits
    
733,491
      
735,873
  
Total deposits
    
1,037,341
      
1,038,495
  
 
                
Borrowings
    
448,451
      
435,046
  
Advance payments by borrowers for taxes
    
11,409
      
4,371
  
Other liabilities
    
46,996
      
37,790
  
Total liabilities
    
1,544,197
      
1,515,702
  
 
                
Shareholders' equity:
                
Common stock
    
280
      
285
  
Additional paid-in capital
    
331,128
      
330,327
  
Retained earnings
    
177,303
      
187,153
  
Unearned ESOP shares
    
(17,507
)
    
(17,804
)
Accumulated other comprehensive loss, net of taxes
    
(851
)
    
(2,361
)
Cost of shares repurchased
    
(105,885
)
    
(97,921
)
Total shareholders' equity
    
384,468
      
399,679
  
Total liabilities and shareholders' equity
  
$
1,928,665
    
$
1,915,381
  
 
                
Share Information
                
Shares outstanding
    
28,004
      
28,463
  
Book value per share
  
$
13.73
    
$
14.04
  
Closing market price
  
$
16.46
    
$
16.76
  
Price to book ratio
    
119.88
%
    
119.37
%


- 8 -

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
March 31,
    
December 31,
    
September 30,
    
June 30,
    
March 31,
  
 
  
2019
    
2018
    
2018
    
2018
    
2018
  
 
  
(Dollars in Thousands, except per share amounts)
  
Condensed Results of Operations:
                              
Net interest income
  
$
12,936
      
13,466
      
13,850
      
13,720
      
13,141
  
Provision for loan losses
    
(680
)
    
-
      
40
      
(220
)
    
(880
)
Total noninterest income
    
24,257
      
25,636
      
34,062
      
33,318
      
25,183
  
Total noninterest expense
    
29,349
      
31,846
      
36,426
      
34,737
      
30,147
  
Income before income taxes
    
8,524
      
7,256
      
11,446
      
12,521
      
9,057
  
Income tax expense
    
1,982
      
1,578
      
2,743
      
3,101
      
2,104
  
Net income
  
$
6,542
      
5,678
      
8,703
      
9,420
      
6,953
  
Income per share – basic
  
$
0.25
      
0.21
      
0.32
      
0.34
      
0.25
  
Income per share – diluted
  
$
0.24
      
0.21
      
0.31
      
0.34
      
0.25
  
Dividends declared per share
  
$
0.62
      
0.12
      
0.12
      
0.12
      
0.62
  
 
                                        
Performance Ratios:
                                        
Return on average assets - QTD
    
1.39
%
    
1.18
%
    
1.80
%
    
2.02
%
    
1.57
%
Return on average equity - QTD
    
6.65
%
    
5.58
%
    
8.48
%
    
9.40
%
    
6.90
%
Net interest margin - QTD
    
2.93
%
    
2.99
%
    
3.07
%
    
3.14
%
    
3.18
%
 
                                        
Return on average assets - YTD
    
1.39
%
    
1.64
%
    
1.80
%
    
1.80
%
    
1.57
%
Return on average equity - YTD
    
6.65
%
    
7.60
%
    
8.25
%
    
8.13
%
    
6.90
%
Net interest margin - YTD
    
2.93
%
    
3.09
%
    
3.13
%
    
3.16
%
    
3.18
%
 
                                        
Asset Quality Ratios:
                                        
Past due loans to total loans
    
0.46
%
    
0.50
%
    
0.67
%
    
0.54
%
    
0.53
%
Nonaccrual loans to total loans
    
0.49
%
    
0.48
%
    
0.48
%
    
0.46
%
    
0.50
%
Nonperforming assets to total assets
    
0.44
%
    
0.45
%
    
0.45
%
    
0.45
%
    
0.54
%



- 9 -

WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
  
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
March 31,
    
December 31,
    
September 30,
    
June 30,
    
March 31,
  
 
  
2019
    
2018
    
2018
    
2018
    
2018
  
Average balances
  
(Dollars in Thousands)
  
Interest-earning assets
                              
Loans receivable and held for sale
   $
1,477,991
      
1,496,125
      
1,507,632
      
1,451,507
      
1,398,043
  
Mortgage related securities
    
115,674
      
111,004
      
106,047
      
109,879
      
113,688
  
Debt securities, federal funds sold and short term investments
    
194,669
      
179,232
      
176,733
      
192,422
      
165,863
  
    Total interest-earning assets
    
1,788,334
      
1,786,361
      
1,790,412
      
1,753,808
      
1,677,594
  
Noninterest-earning assets
    
125,396
      
119,715
      
122,575
      
119,291
      
113,317
  
    Total assets
   $
1,913,730
      
1,906,076
      
1,912,987
      
1,873,099
      
1,790,911
  
 
                                        
Interest-bearing liabilities
                                        
Demand accounts
   $
36,268
      
36,941
      
37,936
      
37,291
      
37,384
  
Money market and savings accounts
    
176,237
      
184,873
      
185,864
      
166,587
      
153,226
  
Certificates of deposit
    
735,471
      
722,774
      
707,970
      
707,758
      
697,644
  
    Total interest-bearing deposits
    
947,976
      
944,588
      
931,770
      
911,636
      
888,254
  
Borrowings
    
438,905
      
439,601
      
444,570
      
445,064
      
379,115
  
    Total interest-bearing liabilities
    
1,386,881
      
1,384,189
      
1,376,340
      
1,356,700
      
1,267,369
  
Noninterest-bearing demand deposits
    
97,951
      
97,677
      
100,804
      
96,108
      
91,806
  
Noninterest-bearing liabilities
    
30,027
      
20,219
      
28,632
      
18,266
      
22,828
  
    Total liabilities
    
1,514,859
      
1,502,085
      
1,505,776
      
1,471,074
      
1,382,003
  
Equity
    
398,871
      
403,991
      
407,211
      
402,025
      
408,908
  
    Total liabilities and equity
   $
1,913,730
      
1,906,076
      
1,912,987
      
1,873,099
      
1,790,911
  
 
                                        
Average Yield/Costs
                                        
Loans receivable and held for sale
    
4.69
%
    
4.63
%
    
4.56
%
    
4.61
%
    
4.48
%
Mortgage related securities
    
2.66
%
    
2.58
%
    
2.41
%
    
2.35
%
    
2.28
%
Debt securities, federal funds sold and short term investments
    
2.73
%
    
2.52
%
    
2.39
%
    
2.12
%
    
2.12
%
    Total interest-earning assets
    
4.35
%
    
4.29
%
    
4.22
%
    
4.20
%
    
4.10
%
 
                                        
Demand accounts
    
0.09
%
    
0.09
%
    
0.10
%
    
0.09
%
    
0.08
%
Money market and savings accounts
    
0.63
%
    
0.47
%
    
0.35
%
    
0.30
%
    
0.24
%
Certificates of deposit
    
2.04
%
    
1.82
%
    
1.62
%
    
1.46
%
    
1.29
%
    Total interest-bearing deposits
    
1.71
%
    
1.49
%
    
1.30
%
    
1.19
%
    
1.06
%
Borrowings
    
2.08
%
    
2.10
%
    
1.90
%
    
1.74
%
    
1.61
%
    Total interest-bearing liabilities
    
1.82
%
    
1.68
%
    
1.50
%
    
1.37
%
    
1.22
%


- 10 -

COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
  
                               
   
At or For the Three Months Ended
  
   
March 31, 2019
    
December 31, 2018
    
September 30, 2018
    
June 30, 2018
    
March 31, 2018
  
   
(Dollars in Thousands)
  
Condensed Results of Operations:
                              
Net interest income
  
$
13,132
      
13,774
      
14,121
      
13,747
      
13,304
  
Provision for loan losses
    
(700
)
    
-
      
-
      
(250
)
    
(900
)
Total noninterest income
    
881
      
911
      
1,312
      
1,137
      
939
  
Noninterest expenses:
                                        
Compensation, payroll taxes, and other employee benefits
    
4,756
      
4,761
      
4,435
      
4,301
      
4,888
  
Occupancy, office furniture and equipment
    
972
      
842
      
826
      
813
      
826
  
Advertising
    
181
      
185
      
183
      
241
      
140
  
Data processing
    
457
      
422
      
414
      
400
      
435
  
Communications
    
82
      
92
      
112
      
121
      
100
  
Professional fees
    
268
      
339
      
257
      
180
      
191
  
Real estate owned
    
32
      
(62
)
    
(128
)
    
(126
)
    
317
  
Loan processing expense
    
-
      
-
      
-
      
-
      
-
  
Other
    
489
      
571
      
701
      
658
      
785
  
Total noninterest expense
    
7,237
      
7,150
      
6,800
      
6,588
      
7,682
  
Income before income taxes
    
7,476
      
7,535
      
8,633
      
8,546
      
7,461
  
Income tax expense
    
1,687
      
1,632
      
2,003
      
1,970
      
1,668
  
Net income
  
$
5,789
      
5,903
      
6,630
      
6,576
      
5,793
  
                                         
Efficiency ratio - QTD
    
51.64
%
    
48.69
%
    
44.06
%
    
44.27
%
    
53.94
%
Efficiency ratio - YTD
    
51.64
%
    
47.63
%
    
47.28
%
    
49.00
%
    
53.94
%






- 11 -

MORTGAGE BANKING SEGMENT
  
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
  
(Unaudited)
  
 
                              
 
  
At or For the Three Months Ended
  
 
  
March 31,
    
December 31,
    
September 30,
    
June 30,
    
March 31,
  
 
  
2019
    
2018
    
2018
    
2018
    
2018
  
 
  
(Dollars in Thousands)
  
Condensed Results of Operations:
                              
Net interest income
  
$
(208
)
    
(332
)
    
(286
)
    
(40
)
    
(192
)
Provision for loan losses
    
20
      
-
      
40
      
30
      
20
  
Total noninterest income
    
23,571
      
24,986
      
33,165
      
32,547
      
24,731
  
Noninterest expenses:
                                        
Compensation, payroll taxes, and other employee benefits
    
16,060
      
18,499
      
23,164
      
22,078
      
16,241
  
Occupancy, office furniture and equipment
    
1,804
      
2,018
      
1,925
      
1,792
      
1,813
  
Advertising
    
777
      
854
      
1,041
      
759
      
720
  
Data processing
    
308
      
309
      
386
      
224
      
186
  
Communications
    
246
      
290
      
300
      
314
      
282
  
Professional fees
    
426
      
52
      
319
      
458
      
514
  
Real estate owned
    
-
      
-
      
-
      
-
      
-
  
Loan processing expense
    
805
      
643
      
837
      
904
      
988
  
Other
    
1,912
      
2,297
      
2,064
      
1,964
      
2,197
  
Total noninterest expense
    
22,338
      
24,962
      
30,036
      
28,493
      
22,941
  
Income before income taxes
    
1,005
      
(308
)
    
2,803
      
3,984
      
1,578
  
Income tax expense
    
286
      
(62
)
    
737
      
1,133
      
435
  
Net income
  
$
719
      
(246
)
    
2,066
      
2,851
      
1,143
  
 
                                        
Efficiency ratio - QTD
    
95.61
%
    
101.25
%
    
91.35
%
    
87.65
%
    
93.49
%
Efficiency ratio - YTD
    
95.61
%
    
92.89
%
    
90.60
%
    
90.16
%
    
93.49
%
 
                                        
Loan originations
    
501,432
      
600,156
      
761,206
      
721,184
      
516,020
  
Purchase
    
89.9
%
    
91.1
%
    
92.1
%
    
92.6
%
    
85.1
%
Refinance
    
10.1
%
    
8.9
%
    
7.9
%
    
7.4
%
    
14.9
%
Gross margin on loans sold(1)
    
4.57
%
    
4.42
%
    
4.49
%
    
4.45
%
    
4.63
%
 (1) - Gross margin on loans sold is the ratio of mortgage banking income (excluding the change in interest rate lock fair value) divided by total loan originations.







- 12 -